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How do I cash in my pension?
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# 1
Emily1975
Old 22-08-2010, 2:18 PM
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Default How do I cash in my pension?

Hi - great site.

I used to contribute to a pension with a former employer but left several years ago. The money is still just sitting there doing nothing and I occasionally get a statement from Norwich Union telling me what the level of savings is.

Money has been tight this year and I deserve a holiday! There's only a couple of thousand pounds in this fund which is likely to only provide a pension of a few hundred pounds so I'd rather just take the cash. Does anyone here know how I go about this as I find pensions too complicated!

Thanks.
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# 2
dunstonh
Old 22-08-2010, 2:24 PM
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Quote:
The money is still just sitting there doing nothing
Its not doing nothing. It is subject to investment returns.

Quote:
Money has been tight this year and I deserve a holiday!
I will leave Bendix to comment on that one!
Quote:
I'd rather just take the cash. Does anyone here know how I go about this
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I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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# 3
ankspon
Old 22-08-2010, 2:26 PM
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You can't touch it till you retire
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# 4
Emily1975
Old 22-08-2010, 3:03 PM
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Hmmm are you sure? I don't remember being told this at the time.

Can anyone else confirm?
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# 5
seven-day-weekend
Old 22-08-2010, 3:09 PM
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Quote:
Originally Posted by Emily1975 View Post
Hmmm are you sure? I don't remember being told this at the time.

Can anyone else confirm?
I think you probably were told at the time as your product is called a PENSION which seems to suggest that it might be for use when you are of pensionable age.

It is not a savings account.

You can not access it until you are 55 at the earliest and then you can only have 25% as cash.

You can transfer it into another pension at any time. so if you join another employer's pension scheme it may be worth transferring it into that.
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Last edited by seven-day-weekend; 22-08-2010 at 3:11 PM.
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# 6
RichandJ
Old 22-08-2010, 3:10 PM
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If it's a pension you cannot touch it until age 55 - this is the law. It used to be 50 but that changed on 6th April this year. The only legal way pensions can now be paid before 55 are certain schemes with a guaranteed early retirement age (eg certain sports) or if you are going to die within a year.
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# 7
Emily1975
Old 22-08-2010, 3:33 PM
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But it's my money! It doesn't seem reasonable to me that I can't access it. What if I needed it in an emergency...

OK, maybe I could take a cheaper holiday or something but what if there was some work needed doing on the house, or I needed some expensive medical procedures? Would that be sufficient reasoning for Norwich Union to give me access?
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# 8
Sparx
Old 22-08-2010, 3:45 PM
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Quote:
Originally Posted by Emily1975 View Post
But it's my money! It doesn't seem reasonable to me that I can't access it. What if I needed it in an emergency...

OK, maybe I could take a cheaper holiday or something but what if there was some work needed doing on the house, or I needed some expensive medical procedures? Would that be sufficient reasoning for Norwich Union to give me access?
Like it has already been said, it is not a Savings account for you to access as you please and take money from.. No matter what the reason is, you will not be able to take a penny from it.

It is not an emergency fundings account.
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# 9
sandsy
Old 22-08-2010, 3:59 PM
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Quote:
Originally Posted by Emily1975 View Post
But it's my money! It doesn't seem reasonable to me that I can't access it.
You agreed to the terms and conditions when you joined your previous employer's pension scheme. There's no way to get your hands on any of the money until you're at least 55.
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# 10
hugheskevi
Old 22-08-2010, 4:48 PM
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Quote:
You can't touch it till you retire
The terms 55, retire, State Pension age, Normal Retirement/Pension age, etc, all have very specific techincal meanings where pensions are concerned.

Using them interchangably can cause confusion amongst those who are not familiar with the terminology.

Quote:
Can anyone else confirm?
To help you with research, I've linked all the threads in August about 'can I cash my pension in' below...

http://forums.moneysavingexpert.com/....php?t=2674671

http://forums.moneysavingexpert.com/showthread.php?t=2671207


http://forums.moneysavingexpert.com/showthread.php?t=2665877


http://forums.moneysavingexpert.com/showthread.php?t=65068

http://forums.moneysavingexpert.com/showthread.php?t=2644881


http://forums.moneysavingexpert.com/showthread.php?t=2639295
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# 11
dzug1
Old 22-08-2010, 4:51 PM
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Quote:
Originally Posted by Emily1975 View Post
But it's my money! It doesn't seem reasonable to me that I can't access it. What if I needed it in an emergency...

OK, maybe I could take a cheaper holiday or something but what if there was some work needed doing on the house, or I needed some expensive medical procedures? Would that be sufficient reasoning for Norwich Union to give me access?

The only reasoning sufficient for Norwich Union to release the money to you now would be the government changing the law so that it would no longer be illegal for them to do so.

And it's not 'your money' - it's held in trust for you but it doesn't belong to you directly.
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# 12
dunstonh
Old 22-08-2010, 6:38 PM
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Quote:
But it's my money! It doesn't seem reasonable to me that I can't access it. What if I needed it in an emergency...
Its not your money. It ceased to be your money when you paid into the pension. You placed it in a trust to be of benefit to you in your retirement. Hence why its called pension.

Pensions are there to pay a pension. Hence the name. Not to be used as savings accounts.

Quote:
Would that be sufficient reasoning for Norwich Union to give me access?
Your death.
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# 13
Dick here
Old 22-08-2010, 6:38 PM
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Quote:
Originally Posted by Emily1975 View Post
But it's my money! It doesn't seem reasonable to me that I can't access it.
This is a wind-up I assume. If not, I feel very sorry for you Emily
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# 14
savingforoz
Old 22-08-2010, 7:32 PM
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Quote:
Originally Posted by Dick here View Post
This is a wind-up I assume. If not, I feel very sorry for you Emily
I did wonder whether it was a wind-up when I read the first post. I find it hard to believe that anyone can be so financially illiterate. To cash in a pension in order to go on holiday? (not that it's possible, as so many before me have pointed out).

Emily, if it's not a wind-up, how exactly do you see your retirement being funded, if not through your own contributions to a pension or stocks and shares ISA?
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Last edited by savingforoz; 22-08-2010 at 7:34 PM.
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# 15
bendix
Old 23-08-2010, 8:51 AM
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I suspect it's not a windup. Even if it is, it serves a useful purpose and is indicative of Oscar Wilde's theory that life imitates art. There will be literally millions of people who think like the OP and would happily raid their pension to pay for holidays or tvs because - let's face it -they're worth it.
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# 16
amitkum
Old 24-08-2010, 7:55 AM
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I think you can't withdraw it till you retire.
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# 17
wotsthat
Old 24-08-2010, 3:58 PM
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I think people should have to write in their own hand at the bottom of pension agreements that they understand that funds will not be accessible until retirement etc.

This is something that is raised on this forum enough times to demonstrate that it isn't being correctly explained at the outset or that it's not been fully understood.
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# 18
bendix
Old 24-08-2010, 4:07 PM
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I tell you what - I wish it were possible to trade in pension policies. I would gladly offer all of these posters 50p in the for their pension funds, and add them to my own.

Sigh . . if only t'were possible.

Dunstonh, I'm assuming it's not, right?
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# 19
dunstonh
Old 24-08-2010, 4:22 PM
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Quote:
I think people should have to write in their own hand at the bottom of pension agreements that they understand that funds will not be accessible until retirement etc.
Problem is that people claim all sorts after the event. So, what else are you going to get them to write down to say what was said?

I think it just shows how society is getting more stupid and taking less responsibility for their actions.

Quote:
Dunstonh, I'm assuming it's not, right?
You could make a bob or two doing that. Would be nice. However, you would probably find some claims company phoning people up 10 years later saying that you mis-sold them and they can get compensation. (irrespective of what they wrote in their own handwriting).
I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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# 20
Emily1975
Old 24-08-2010, 4:50 PM
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I called Norwich Union today (although they seem to have been taken over by Aviva now). They agreed that it would be impossible to access the money now and said it was to do with tax relief.

I still think it's outrageous and I am going to write to them to complain. Do you think I could be entitled to some compensation in lieu of the inconvenience?

is this an example of miselling?

Last edited by Emily1975; 24-08-2010 at 4:53 PM.
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